duties of an executor

Duties of an Executor

Episode 4: Louisville probate attorney Scott Scheynost will discuss issues related to a common question, “What Happens When You’re Appointed as an Executor?”  This is an honor that carries serious responsibility.  There’s a lot to consider.  Scott will provide 5 important tips to help you fulfill your duties of an executor.

What Is an Executor?

When someone dies, assuming they have a Will, they normally appoint someone to be in charge of handling the estate, once they’ve passed away.  That person is called an “executor” if he’s a male.  A female is called an “executrix.”  If the person died without a Will, the court will appoint an “administrator” or “administratrix.”  Generally speaking, all four assume the same responsibilities regarding the estate of the deceased individual.  He or she will function as the captain of the estate.

duties of an executor

TIP #1:  Handle the Estate like a Business

The estate must be handled in a business-like manner.  It’s a big responsibility, but it can be done, often with the help of an attorney.

Who Should be my Executor?

There are no hard and fast rules.  Because of the nature of the probate process, you need to appoint someone whom you trust to handle the duties of an executor.  It helps if that person has a business background, but it’s not necessary.  The executor may be a family member, an attorney or a close friend.

The executor will apply for a federal tax id number, open a checking account for the estate’s funds and bills, hire a probate attorney to assist with the estate, sign documents related to various court filings, etc.

Does the Executor Get Paid?

Under current Kentucky law, the executor is entitled to fee equal to 5% of the personal property.  He or she can take less or nothing at all.  However, the executor will be heavily involved in probating the Will and closing the estate, not to mention dealing with questions and issues brought up by the heirs.  It can be a lot of work.  There may be expenses incurred, which will be reimbursed to the executor by the estate.

The executor is responsible for paying taxes on any fee they receive from the estate.

In Episode 3 of this podcast, Scott specifically discusses how to open a probate claim.

The Executor Has a Fiduciary Responsibility

Scott explains one of the duties of an executor is that he takes on a fiduciary responsibility relating to the estate.  They have to take care of issues throughout the probate process.  They are prevented from showing favoritism toward one or more heirs.  They have to follow any applicable laws related to the probate process.  If you fail to do this, the court can remove the executor and appoint someone else.

Do I Have to be Someone’s Executor?

Actually, the answer is no.  If you’re uncomfortable with this level of responsibility, for any reason, you can decline to serve as the executor.  Someone else will be appointed.

TIP #2:  Be Prompt in Your Communication

As an executor, you should stay up to date on your communication with the attorney, the court, and the heirs.  The process can be unnecessarily delayed when you don’t communicate effectively or efficiently.  This is especially important when it comes to specific court deadlines.

TIP #3:  Be Organized

At the start, all of this can feel overwhelming.  However, the more organized you are the easier the process will become.  Keep a set of files for important documents such as titles to cars or deeds, bank statements, bills, etc.  This helps the process to move more quickly.  It also makes it cheaper in terms of the attorney fees, which will be billed to the estate.

Doesn’t the Attorney Handle Everything?

It varies by the attorney.  The more involved the attorney is, the more expenses that activity will generate as legal fees.  While there are some things the attorney may need to handle, the vast majority of the work can and should be done by the executor.

Scott is ready to step in when the executor needs help, but generally speaking, his approach helps to minimize the legal fees charged to the estate during the probate process.

Scott will make sure the executor understands the process from the beginning.  He’ll assist with making sure the legal requirements, deadlines and other issues are explained.  He’ll provide guidance and advice regarding key decisions the executor needs to make.  Again, the focus is to minimize legal fees for the estate.

Remember, the executor has fiduciary duty to minimize the expenses, keep the bills paid, keep the property secure and in order, until the estate is settled.

Securing and Protecting the Home

When a home or vehicle is included in the estate, it’s important to remember that the insurance policies should remain in effect.  This would protect the estate from a loss, should the house be damaged by weather, fire, vandalism, etc.  The same goes for the vehicle(s).  If the vehicle is part of the estate, it’s best that nobody drive the vehicle.  What would happen if it’s involved in a wreck or significant mileage is added?  Both instances can and will impact the value of the estate.

If an insurance premium for either or both come due, the executor is advised to pay those premiums from the estate checking account.

Other expenses the executor should pay is the gas and electric bill.  Once winter sets in, if the heat is off in the house, pipes could freeze and burst, causing damage to the property.  It’s best to minimize the risk by keeping the temperature inside the house at a reasonable level.

TIP #4:  Be Open with the Heirs

Scott explains that there’s no reason the heirs can’t read the Will.  Jefferson County Kentucky requires that Wills be probated, so the Will itself will become public record.  Anyone can read the Will online, via the County Clerk’s website.  Knowing this, why cause problems by not allowing the heirs to read the Will.  In fact, Scott suggests the executor provide copies of the Will to each heir, if asked.  It’s simply going to reduce suspicions and accusations, which could lead to bigger issues.

Scott also discusses the inventory of the assets that are part of the estate.  The inventory will need to be filed with the court, so again, he suggests sharing the list of inventoried items with the heirs.  Just like the Will, it’ll be a public record.

As the executor, you should also consider keeping the heirs informed about what is going on with property and the bank account.  It can help to prevent or reduce accusations that the executor is doing something wrong or even stealing from the estate.

Transparency avoids a lot of problems.  At the end of the probate process, if all of the heirs will sign a document stating they approve how the estate was handled, the closing of the estate can go much more quickly, including the distribution of estate assets and funds.  Again, be open with the heirs.

If the heirs don’t all sign the document, then a formal accounting of the estate’s assets and related transactions needs to be submitted to the court.  This increases the time required (often by months), fees and legal expenses, which ultimately reduces the amount of money left to be given to the heirs.

Does the Checking Account for the Estate Have to be at a Specific Bank?

One of the initial duties of an executor is to open a checking account in the name of the estate.  Any funds from various bank accounts (checking and savings) that are only in the name of the deceased person, will be transferred into this account.

However, if the decedent had accounts and “Bank A” the executor is not required to open the estate’s bank account at the same bank.  He may decide to do so at “Bank B” where he already knows the people.  This familiarity can help to make banking transactions easier and with less hassle.

TIP #5:  Rely on Your Attorney

The executor will decide which attorney to hire to help him with the estate.  As questions come up, don’t hesitate to ask for help from the attorney.  The attorney has handled many estates and understands the process.  He/She will also help to keep the executor out of trouble, by ensuring the law and other requirements are followed.  The attorney will be happy to help the executor as much as needed.

How Long Does the Probate Process Take?

Scott explains that most estates are handled with fairly little to no problems.  Disputes among the heirs can increase the time, but hopefully, the decedent took the time to properly draft and execute a Will and other important documents.  If this is the case, the probate process may only last 6-10 months, assuming the estate is not overly complicated.  Scott advises that every situation and each state is a little bit different.

Remember, even if you haven’t handled an estate before, Scott comments that the decedent named you as the executor/executrix because they trusted you to be able to handle this responsibility.  It’s actually an honor to serve as someone’s executor/executrix.

For more information, visit LouisvilleProbateLaw.com.

It Cost You Nothing to Speak with Scott

Contact Scott Scheynost at (502) 937-5287.  This podcast is meant to provide information and is not legal advice.  Scott’s principal office is located at 7619 Dixie Highway, Louisville, KY 40258.  Co-host Jim Ray is a non-attorney spokesperson.  This is an advertisement.